“Those who do not remember the past are condemned to repeat it. George Santayana, 1863-1952. (VANGUARD BOOK OF QUOTATIONS, p 93).

The vague promise by the Minister of Information, of 600,000 jobs which will be created by the fuel price increase which was received with skepticism on these pages last week, provides an appropriate point of departure for today’s discussion. We have had seventeen fuel price increases since General Gowon became Head of State and moved it from six kobo (6k) to eight kobo and a half (8.45k). Then, as now, mounting subsidy payments was said to be responsible for the increase.

NEW FUEL PRICE—Minister of State, Petroleum, Dr. Ibe Kachikwu, briefing newsmen on the new fuel price, yesterday, in Abuja.

Again, then, as now, Nigerians were told that the increase would result in more jobs being created and more investment in the sector. In reality, it was not the fuel price increase which propelled Gross Domestic Product, GDP, growth; it was the astronomical and unprecedented rise in the price of crude oil globally. It was during the Gowon administration that the Nigerian economy grew at double digit and was one of the fastest five growing economies in the world.

So astonishing was the pace of expansion that US-based TIME MAGAZINE, in a lead report in the 1970s announced to the world that “If you have anything to sell, go to Nigeria, it is an economy bursting at the seams.” Since then, fuel price increase had not been credited with rapid GDP growth at any time.

Even the second burst of great annual GDP increase, which occurred during Jonathan’s administration, occurred when fuel price was stable. For more than three years, the economy developed at about seven per cent per annum – before it started a steady decline in 2013 till the first quarter of 2016 when it went negative for the first time in twelve years. Crude prices averaging US$118 made it possible.

Let it be said upfront. The only sure benefit of the recent fuel price increase and limited deregulation consists of the savings government will make from subsidy payments. Considerable as it is, even most of that gain will be wiped out by the short-term repercussions.

The announcement of 600,000 jobs is therefore questionable on several grounds. First, there is no historical precedent for it. Second, it is too vague a promise because there are no details regarding which types of jobs and where they will be created. Third, and this is perhaps the most important reason for doubt, the Minister of State, in his own defence of the increase had also mentioned 600.000 jobs.

However, there is a difference. According to the Petroleum Minister, 200,000 new jobs will be created and 400,000 will be saved. There is a quantitative difference between saving jobs and creating them. The conclusion is obvious. Government has no idea how many jobs will be created, if any.

At any rate, irrespective of whether one accepts that 200,000 or 600,000 jobs will be generated, a deliberate or inadvertent omission is noticeable. None of the Ministers talked about the jobs that will be lost on account of the inflation spiral which is inevitable for reasons soon to be made clear. Fact is; jobs will be lost. The net gain in employment is unknown to anybody.

The steep increase in the price of an essential economic commodity, like power and fuel, such as the 67.5 per cent on fuel, would have the same impact on any economy as currency devaluation. President Buhari who had refused currency devaluation but approved the price increase has unofficially devalued the currency.

The inflation spiral which will inevitably follow the fuel price increase would increase cost of production of goods and services; reduce aggregate consumption, lower manufacturing capacity utilisation and add to the misery index in the short run. Nobody, not even governments, is immune from its negative impacts. A few actual examples will help to illustrate the point.

Some print media houses recently increased the cover charge of their papers based on production costs with N87 per litre fuel as a component of the costs. The 67.5 per cent fuel price increase had wiped out all the gains of the cover price increase two months ago; yet they can neither contemplate another cover price increase nor stop circulating paper. Meanwhile, virtually all are operating at a loss each blessed day.

Whatever each government and its agencies had budgeted for fuel in the 2016 budget has been rendered unrealistic by the increase. The obvious answer is for governments to do less than they planned and to cut back on expenditure elsewhere. Individuals on fixed income or on salary commuting to work everyday have already experienced a reduction in their discretionary spending.

They must pay more for transport and less for everything else. Landlords will have a tough time collecting rent from tenants who have not been paid for three months and more employers will fall behind in paying wages and salaries. These are among the several short-term expectations from the price increase. Some of them kicked in immediately; others will follow in rapid succession. The promise of 600,000 jobs is a benefit too remote to soothe the afflicted – especially, when the verdict of history suggests it might never be delivered.